St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1887-12-15
THEY NEED NOT KICK.
The Attorney General Says the Private
Banking Law Is Unconstitutional.
EXAMINER KNOX GETS BACK.
He Says the Bankers Don't Like the
Law Because it Prevents Tax
Dodging.

michael is very kind to me-" said
Bank Examiner Knox yesterday after
he had read over the remarks of the
Hon. NJ. Doran in the proceedings of
the meeting of the private bank men,
held at the Merchants hotel on Tues
day. He has reason to be, and never
fails to vent his dislike whenever he
gets an opportunity. L do not believe
that Vice President Wells was correctly
reported i'll the proceedings as pub
liShed, for l do not think he would cast
such an understandable reflection on the
attorney general as the published re-
ports credit to him. 1t is absurd to
think of such a thing as an opinion
being withheld by me. The facts are
the governor and not with me:
If the law is unconstitutional
| ought to know it as soon as possible,
and, instead of holding it back, would
send it out at once. [ stand for and
represent the state banking system. and
this law aims to protect them. My an
nual report shows that there are 119
firms doing private banking business
in Minnesota. They are none OF them
incorporated, as one might, in most
cases, infer from the fanciful names
they sail under, and so are under no
supervision, are not examined. make no
reports and do not publish, as corporate
banks do, four or five times ayear, state
ments of their condition. Their letter
heads carry large amount of capital,
in round numbers, and they
give every appearance of being
a regularly incorporated concern.
In this way they have all the benefits to
be conveyed by incorporation and yet
evade its cOst-taXatiOn. Yes, the mat
ter of taxation is at the bottom of all
this. This Keller law was passed to
SECURE THE TAXATION
of the funds held by these banks. AT
present these banks swear out one affi-
davit which gives large amount Of de-
pOsits. This is for the people. Another
statement is then fixed up with perhaps
One-tenth as much in deposits. This
is for the assessor.
Il have in mind one bank which is
down III the assessors books for some
5000 deposits. while it advertises $780,
600 or $4,000 deposits. These banks re-
turn only One-half, One-third, one-ffth
and sometimes even One-tenth Of
their actual deposits for taxation. People
never know anything of the condition
of these private banks until after they
have failed. and then they learn to their
sorrow. Regularly Incorporated state
banks and national banks are obliged
by law to publish statements made to
the public examiner four or five times Il
year, and they are taxed on the full
amounts so rendered. The law in queS-
ton was passed to secure the proper
taxation of the funds of these banks, as
we'll as to protect the people against
shaky and irresponsible concerns.
when this bill was passed. ninety
three were for and nine against it. The
whole number Of members of the legiS-
lature, including senators, was $50. The
constitution in section Is Of article O.,
SAYS: The legislature may, by two
thirds vote, pass a general banking law
with the following restrictions and re-
quirementS.' Now the constitutional
question is whether the law means two
thirds of the members present OF two
thirds of all elected. If it means the
latter, then perhaps the point is a good
one. The fact is that it is seldom that
tWO-thirdS of all elected are in attend
ance at any one time. Had the whole
legislature been there, the bill would
have passed by vote Of nine-tenthS of
the body. The whole thing is, however,
a scheme to avoid taxation. The charge
llldG L VI III an way.
thing to do with the opinion of the
attorney general is false in every par
ticular."
ATTORNEY GENERAL CLAPP.
"There seems to be some miSappre-
hension in this matter" said Attorney
General Clapp to GLOBE reporter yes
terday afternoon. ''Gen. Cole called Oh
me yesterday morning and stated that
the private bankers were to hold a
meeting at the Merchants in the after
noon, and that if my opinion was fully
decided upon, it would be a great favor
to the association to have it given out
at the meeting.
II told him." continued the attorney
general, THAT had reached cOnclu-
sion in the matter and should so inform
the public examiner: but owing to the
fact that | was so pressed in my
work, | had not yet written out
the opinion. The opinion was
that the bill was unconstitutional. l
told him he might treat that as My Opin-
ion and convey it to the meeting of the
private bankers. [ certainly thought
everything satisfactory and that Gen.
Cole understood that such was my Opin-
ion. If had thought there was to be
any question in regard to it | would
have put it in writing, busy as | was.
The law is unconstitutional because it
did not receive tWO-thirds vote of the
legislature, which such law must have
aocordinor IN thp constitution -